Groupon data collection scrutinized by Congress

Groupon Inc's privacy and data-collection policies came under congressional scrutiny on Thursday, the latest sign of regulatory pressure on the largest online daily deals company.

Representatives Joe Barton (R-Texas) and Edward Markey (D-Mass.), co-chairmen of the House Bi-Partisan Privacy Caucus, said they sent a letter on Thursday to Groupon Chief Executive Andrew Mason asking about the company's new privacy and data collection policy.

Groupon unveiled new policies earlier this month in an email to its more than 80 million subscribers.

The company said it collects subscribers' contact details and information on their Groupon transactions, financial accounts, location and relationships.

Groupon shares that data with merchants in some instances, such as when subscribers buy or redeem a Groupon coupon with those merchants. The data also is sometimes sent to business partners or advertisers as part of an offer or other activity involving Groupon, according to the policy.

Groupon also said it uses cookies and other technology to help it track subscribers' online activities.

Data like this is seen as crucial to the success of Groupon and other daily deal companies. As they collect more information about customers, these companies will be able to offer more appropriate bargains, increasing the chances subscribers will buy them.

However, this strategy is increasing concern about privacy.

Groupon has made it clear that they are expanding their business model by collecting more personal information and even tracking your location, Rep. Barton said in a statement.

While I do understand that companies participate in these practices to offer better services, I strongly believe that Americans should always be informed of how their personal information is being used and be given control of when their information is shared.

Rep. Markey said he was particularly concerned about Groupon collecting personal information such as phone numbers, e-mails and location data from mobile devices.

This type of sensitive data, especially if it belongs to children and teens, requires special protection, he said.

Their letter asked Groupon if it was willing to let consumers opt-in to the company's data-tracking methods.

The letter also asked Groupon if there has been any breach of customer information and what ways the company can check the age of subscribers.

It also asked whether Groupon's merchants, business partners, and service providers are required to adhere to the company's privacy policies.

In its new policy, Groupon said it encourages merchants and business partners to adopt and post privacy policies. However, the company also said the use of personal information by these parties is not subject to our control.